The past winter’s unfavorable weather continued to weigh on the County’s tourism industry during Spring 2016. As a result, the County’s overall economy struggled: the Coos Index ticked down 0.1% from Winter 2016. The tourism industry’s strong growth came to a halt as the region’s winter sports and outdoor recreational activity plummeted due to the bad weather. The rooms and meals tax fell from the prior quarter for the first time in two years. The goods-producing sector failed to build a momentum: the industrial electricity sales fell on a year-over-year basis after increasing in Winter 2016 for the first time in nearly two years. On a positive note, the County’s housing market remained strong; the volume of home sales grew for the sixth quarter in a row on a year-over-year basis, and its median home price increased three straight quarters.

The state’s economic growth accelerated. The State Index increased for the 23rd straight quarter on a year-over-year basis. The pace of growth accelerated for the fifth quarter in a row. Four out of the five component indicators were up compared to the same period in 2015. The accelerating economic growth was most evident in the scorching labor market. The employment indicator of the State Index grew at the fastest pace since the beginning of the Great Recession. The U.S. BLS data confirms this: the seasonally adjusted number of employed residents was at the highest in May 2016 since at least 1974 when its current data started. Not only that, the pace of the increases had accelerated since the beginning of this year. The number of jobs is also at the record high: the U.S. BLS reports that the state had 661,000 jobs in May 2016, which is the highest monthly record ever. The tourism industry remained strong, although its counterpart in the northern regions suffered from the bad weather. The average Saturday vehicle traffic counts increased by 4.0% on a year-over-year basis, while the inflation-adjusted rooms and meals tax increased by 7.4%. However, the manufacturing industry continued to struggle: industrial electricity sales fell six straight quarters on a year-over-year basis. The unfavorable global environment continued to be an obstacle to the industry’s international exports. The state’s economy will likely stay strong in the near future: three of four state leading indicators were up compared to six months ago in their year-over-year growth rate. The state’s housing market remained strong; the volume of home sales increased six straight quarters at an increasingly fast pace on a year-over-year basis and median home prices rose 14 straight quarters.

Presidential Primary Offset Bad Weather

The Coos economic recovery lost steam during Winter 2016. The Coos Index ticked down 0.7% from Fall 2015. However, it was still higher than Winter 2015, when the Index recorded the lowest point since the Great Recession. The underlying storyline remains the same for Coos Economy for the last a few years. Despite the strong performance from the tourism sector, the overall economy struggled to recover from the Great Recession. This is evident in persistent declines in number of employed residents, an indicator that reflects a broad economy as opposed to sectoral indicators such as rooms and meals tax. Tourism sector continued to grow despite the unusually warm weather with little snow. The rooms and meals tax grew 12 consecutive quarters on a year-over-year basis and nearly 16 percent higher than the level seen at the beginning of the Great Recession. The number of visitors to the County had been on the rise as well; the average Saturday vehicle traffic counts increased nine times in past 10 quarters on a year-over-year basis. The County’s housing market continued to rebound; the volume of home sales grew for the fifth quarter in a row on a year-over-year basis, and its median home price increased by a double digit compared to a year earlier.

The state’s economy advanced. The State Index increased for the 22nd straight quarter on a year-over-year basis. The pace of growth accelerated for the fourth quarter in a row. Four out of the five component indicators were up compared to the same period in 2015. The presidential primary provided a boost. However, unusually warm weather and lack of snow discouraged skier nights in the northern regions of the state, but encouraged day travels to the southern regions. The average Saturday vehicle traffic counts increased by 3.4%, the highest pace since the Great Recession. The inflation-adjusted rooms and meals tax also increased by 7.8%, second only to the rate recorded in Fall 2015 since the Great Recession. The U.S. BLS revised data shows that the labor market continues to expand; the seasonally adjusted number of employed residents increased for the 22nd consecutive quarter. The only blemish was the industrial production; industrial electricity sales fell five straight quarters. The strong dollar and thus weak exports appeared to have weighed on the state’s manufacturing industry. The state’s leading indicators painted a mixed picture for the future; two of four state leading indicators were up compared to six months ago in their year-over-year growth rate. The state’s housing market remained strong; the volume of home sales increased five straight quarters at an increasingly fast pace on a year-over-year basis and median home prices rose 13 straight quarters.

Coincident Index

The Coos Coincident Index, which tracks the current state of the Coos economy, inched down to 88.2 in Winter 2016 from Fall 2015’s revised value of 88.8. On a quarterly year-over-year basis, the Index increased three consecutive quarters.

The New Hampshire Coincident Index rose to 101.9 in Winter 2016 from 2015 Fall’s revised value of 101.4. On a quarterly year-over-year basis, the Index increased for the 22nd consecutive quarter.

How strong are the forces of change?

During Winter 2016, the Coos Coincident Index increased for the third straight quarter after decreasing five consecutive quarters on a quarterly year-over-year basis. The pace of the increases accelerated three straight quarters. Four of the five component indicators turned up from their Winter 2015 levels. The State Index increased for the 22nd quarter in a row on a quarterly year-over-year basis. Four out of the five component indicators remained up from a year ago. The pace of growth accelerated four straight quarters.

Household Employment

Household employment measures the number of employed residents. In contrast to non-farm payroll employment that is more commonly used in the national and state indexes, household employment includes self-employed, unpaid domestic help and both farm and non-farm workers, all of which may be more significant in rural than urban economy. Employment tends to rise as economy grows.

Rooms Revenue

Rooms revenue represents spending on accommodations paid by travelers. It’s an important indicator for the tourism sector; it’s not an estimate but an official count as reported by the New Hampshire Department of Revenue Administration. However, it may not fully reflect changes in the overall activity level in the tourism sector. Although it tracks a majority of overnight travelers, it excludes day travelers and overnight travelers staying with friends and family and those who have second homes. However, this drawback may be less of a concern in the northern regions of the state where day travelers are a small minority due to the distance from the major urban areas.

Traffic Counts

It tracks the average vehicle traffic counts on Saturdays each quarter, which is automatically collected from traffic recorders located throughout the State. 12 recorders are selected to reflect traveler traffic in each of the seven travel regions in the State with two recorders from Coos County – Jefferson and Northumberland.

Wages and Salaries

The estimated wage and salaries disbursements represent total compensation including pay for vacation, bonuses, stock options, and tips. This data is obtained from all workers covered under state and federal unemployment insurance laws; in other words, it is full population counts, not sample-based estimates. Unlike the household employment report, however, it excludes self-employed, domestic workers, and most agricultural workers. For this difference, wages and salaries series complements the number of employed residents in monitoring the labor market conditions as well as the economy. A change in wages and salaries, adjusted for inflation, may reflect changes in the number of jobs, the ratio between part-time and full-time jobs, and wage rates.

Industrial Electricity Sales

It measures sales of electricity (kWh) to industrial customers. Utilities categorize consumers based on the North American Industry Classification System, demand, or usages. The industrial sector includes manufacturing, construction, mining, agriculture, fishing, and forestry establishments. Among these industries, manufacturing is a primary industry in Coos County making up 69% (73% for New Hampshire in 2008) of the total number of jobs in the industrial sector mentioned above according to the 2006 QCEW data. Therefore, a rise in industrial electricity sales may largely indicate invigorating manufacturing activities in the economy.

Real Estate

NCEI reports two real estate market indicators – home sales and median home prices. The data tracks residential homes sold, including condos and manufactured homes. The health of the real estate sector is important to the broad economy due to its multiplier effect. Home transactions not only generate income for real estate brokers and mortgage bankers but also bring more businesses in other sectors including moving services, home furnishings and appliances. In order to minimize volatility in Coos real estate market, indicators are averaged over a four quarter period.

Coos County

The County’s housing market continued to rebound during Fall 2015. The volume of home sales, smoothed by four quarter moving average, rose four straight quarters on a year-over-year basis. The median home price, smoothed by four quarter moving average, increased for the first time in two years on a year-over-year basis.

New Hampshire

The state’s housing market was strong. The volume of home sales, smoothed by the four-quarter moving average, grew four quarters in a row at an increasingly faster pace on a year-over-year basis. The median home price, smoothed by four quarter moving average, increased for the 12th consecutive quarter and its pace of increases accelerated three consecutive quarters.

Leading Indicators

Leading indicators are to provide a sense of future economic conditions in the state of New Hampshire. The report includes six leading indicators grouped into three different categories – 1) four leading indicators for the broad economy of New Hampshire; 2) a leading indicator of the state’s tourism industry; 3) a leading indicator of the U.S. economy. The list of leading indicators for New Hampshire’s economy includes initial unemployment claims, average weekly hours of work in the total private sector, building permits, and new business formation; the state’s tourism industry has the Massachusetts Leading Index published by the Philadelphia Federal Reserve Bank; the report also includes interest rate spread between 10-year Treasury and federal funds for the U.S. economy. Although the list is by no means exhaustive and indicators often do not go back long enough in time for statistically robust analysis, we believe it can still be a helpful tool. Raw data are processed so as to make it easier to detect a change in the direction of the underlying trend in the economy. In the summary table below, “up” during recession indicates recovery around the corner while “down” during an expansion signals an impending recession. During expansion, the likelihood of recession increases when more indicators turn down persistently. For example, all four leading indicators of NH economy start posting “down” month after month at the beginning of the state’s 2008 recession. The New Hampshire recessions are defined as the period of declines in the New Hampshire Coincident Index published by the Philadelphia Federal Reserve Bank.

In February 2016, two of the four New Hampshire leading indicators were up compared to six months ago in their year-over-year growth rate.

*This series is inverted so that an “up” means an improvement. Layoffs decrease (inverted layoff increases) when the labor market conditions improve.
**”Up” or “down” is a change in the spread from prior month.
***”Up” or “down” is a change in the Index from six month ago.

Initial Unemployment Claims

The series is inverted so that an increase means an improvement. Initial claims decrease (inverted initial claims increase) when the labor market condition improves. The number of Initial claims tends to lead the business cycle. The chart demonstrates that it correctly predicted both the beginning and the ending of the past two recessions.

Average Weekly Hours of Work in Private Sector

It tends to turn before the economy does because employers often increase work hours of existing workers at the beginning of the recovery before committing to new hires; they do not want to take the risk of committing to new hires and seeing the economy fall back again. This data for New Hampshire only goes back to 2007.

New Business Formation

All companies that want to do business in the state must register at the NH Secretary of State. This data includes all types of businesses including corporations and limited liabilities companies. The number of new businesses tends to lead the business cycle. Although this series goes back only to 2006, it correctly predicted the beginning and ending of the state’s 2008 recession. The series is smoothed by 12 month moving average.

Building Permits for Single Family Homes

It’s often the case housing recovery leads the broad economy out of recession. This is because of its extensive ripple effect over the rest of the economy. Building construction requires inputs from many other industries such as window manufacturing, logging, plumbing, electricity services, banking, and home furnishings such as consumer electronics and furniture. The 2001 recession was a mild recession and a rare one that did not involve a housing slump. The series is smoothed by four month moving average.

Interest Rate Spread

The interest rate spread, the 10 year Treasury less the Federal Funds, is considered one of the best leading indicators for the national economy. The indicator is the sum of all the past values plus the spread in the current period. Therefore, it decreases when the current spread is negative (the 10 year T rate is lower than the Fed Funds Rate), which is indicative of an impending recession.

Massachusetts Leading Index

The state of Massachusetts economy is critical for the New Hampshire’s tourism industry, since the largest share of visitors to New Hampshire come from Massachusetts. Therefore, the Massachusetts Leading Index may also shed light on the future performance of the New Hampshire’s tourism industry. The MA Leading Index is published by the Philadelphia Federal Reserve Bank. A New Hampshire tourism recession was defined as a period of declines in the year-over-year growth of real spending at lodgings.

Technical Notes

Employment is the number of people employed from the household survey.

The current values of rooms and meals revenues are estimated using the data obtained from participating local hoteliers.

The data series reported in the dollar values are adjusted for inflation.

Real Estate data is obtained from the Northern New England Real Estate Network (NNEREN). All analysis and commentary related to the statistics is that of the authors, and not that of NNEREN.

The Coos economy rebounded during Fall 2015. The Coos Index was back on a path to economic growth. The Index inched up 0.3% from the same time last year. The growth was largely due to record number of travelers who visited the region. The rooms and meals tax collected from the County’s businesses was the largest for Fall in a decade; and the number of visitors was also estimated to be the largest for Fall since 2007. However, the rest of the economy continued to struggle. The number of employed residents in the County, a broad economic indicator, decreased for the ninth consecutive quarter on a year-over-year basis. The County’s housing market continued to rebound; the volume of home sales grew for the fourth quarter in a row on a year-over-year basis, and its median home price was up compared to the same time last year for the first time in two years.

The state’s economy advanced. The State Index increased for the 21st straight quarter on a year-over-year basis. The pace of growth accelerated for the third quarter in a row. Four out of the five component indicators were up compared to the same period in 2014. The tourism sector had a record-breaking season; the industry saw the largest number of travelers to the state for Fall since at least 2007, as a result, the inflation-adjusted rooms and meals tax collected from the state’s restaurants and hotels was the largest ever for Fall since 1991. The labor market, however, hinted that economic growth of the overall economy might be slowing down; the seasonally adjusted number of employed residents declined for the first time since Fall 2009. In addition, all four state leading indicators turned down compared to six months ago in their year-over-year growth rate. The state’s housing market continued to heat up; the volume of home sales registered a double-digit growth on a year-over-year basis and the pace of increases in median home prices rose three straight quarters.

The Coos economy’s reliance on traveler spending has deepened during summer 2015. While the tourism industry’s contribution to the region’s economy is vital, it may need some help. The revised data show that the County Index decreased six quarters in a row. The tourism sector remained strong, and the year-over-year percentage increase in spending at lodgings rose for the 10th consecutive quarter. However, the rest of the economy struggled. The labor market showed troubling signs. The County’s unemployment rate of 3.9%, the lowest for August since 2007, disguises the seriousness of the unemployment situation. The seemingly remarkable unemployment statistic was a result of the aging population and net out-migration, rather than job growth. The County’s labor force has drastically declined since 2010, marking a near 8% decline. This appears to be a matter of the lack of job opportunity. Wages and salaries decreased for the sixth consecutive quarter on a year-over-year basis. The County’s housing market continued to stabilize, as the pace of declines in median home prices was the slowest since spring 2014, and the volume of home sales increased three straight quarters.

The state’s economic growth gained momentum during summer 2015. The State Index increased for the 20th straight quarter on a year-over-year basis. The pace of increases in the Index was the fastest since the Great Recession. Four out of the five component indicators were up compared to the same period in 2014. The labor market continued to expand; the number of employed residents grew at a pace unseen since the Great Recession. The tourism sector remained strong; both the average Saturday vehicle traffic counts and spending at lodgings were up from the same period a year earlier. The state’s housing market revitalized; the volume of home sales bounced back to a double-digit growth and the pace of increases in median home prices rose two straight quarters. Three of the four state leading indicators remained up.

The Coos economy showed signs of stabilization after declining last year. The County Index ticked up from the prior quarter for the first time since Fall 2013. Although the economic activity level was still down from the same time a year earlier, the pace of declines was the slowest in a year on a year-over-year basis. The boost came from the tourism sector. More travelers came to the region and spent more; the year-over-year percent increase in the average Saturday vehicle traffic counts was the highest since the Great Recession and the year-over-year percent increase in spending at lodgings was also the highest since Fall 2013. However, the rest of the economy struggled. The goods-producing sector weakened further; industrial electricity sales marked a double-digit decline compared to the same period a year ago. The labor market contracted; wages and salaries decreased for the fifth consecutive quarter on a year-over-year basis. This declining job opportunities in the County appeared to have encouraged its residents to find jobs from outside the region; the pace of decreases in the number of employed residents was the slowest since Summer 2013. Although wages and salaries and number of employed residents are both labor market indicators, the latter is by place of residence while the former is by place of work. The County’s housing market saw signs of stabilization after a year of declines in home prices; the pace of declines in median home prices fell to a single digit on a year-over-year basis after marking three consecutive double-digit declines, and the volume of home sales increased two straight quarters.

The economic activity surpassed the pre-recession level in New Hampshire. The State Index surpassed an index of 100 for the first time since the Great Recession. Four out of the five component indicators either exceeded or reached the pre-recession level, an index of 100. The labor market strengthened; the number of employed residents was higher than any point since the Great Recession. The tourism sector remained strong; both the average Saturday vehicle traffic counts and spending at lodgings were up from the same period a year earlier. The state’s housing market data appeared to have heated up again; the volume of home sales increased two consecutive quarters after declining two quarters in a row and the pace of increases in median home prices rebounded after falling four straight quarters. Three of the four state leading indicators remained up.

The economic activity decreased in Coos County in winter 2015. The County Index fell for the fourth consecutive quarter on a year-over-year basis. The pace of declines accelerated during the same period. The goods-producing sector weakened further; industrial electricity sales marked a double-digit decline compared to the same period a year ago. The broad economy faltered; both number of employed residents and wages and salaries decreased from prior year. On a positive note, more travelers came to the region and spent more; average Saturday vehicle traffic counts increased six consecutive quarters while spending at lodgings rose for the eighth straight quarter. The County’s housing market saw a sign of stabilization; although median home prices fell four consecutive quarters on a quarterly year-over-year basis, the volume of home sales rebounded and was up from winter 2014.

While the County Index declined further, the State Index inched closer to the pre-recession level. Four out of the five component indicators either exceeded or nearly reached the pre-recession level, an index of 100. The BLS’s revised employment data showed encouraging signs; the pace of increases in the number of employed residents accelerated two straight quarters. The tourism sector remained strong; both the average Saturday vehicle traffic counts and spending at lodgings were up from the same period a year earlier. The state’s housing market data painted a mixed picture; the volume of home sales rebounded and rose from the winter 2014 level, while the pace of increases in median home prices continued to slow down. Three of the four state leading indicators remained up; number of building permits was down three straight months.

The economic activity decreased in Coos County in fall 2014. The County Index fell for the third consecutive quarter on a year-over-year basis. The broad economy faltered; number of employed residents fell three straight quarters at an accelerating pace while wages and salaries also decreased for the third quarter in a row. The goods-producing sector weakened; industrial electricity sales decreased two consecutive quarters on a year-over-year basis. On a bright side, the tourism sector continued to expand; average Saturday vehicle traffic counts increased five consecutive quarters while spending at lodgings rose for the seventh straight quarter. The County’s housing market fell further; both housing sales and median home prices were lower than their fall 2013 levels.

The State’s economic growth slowed in fall 2014. Although the State Index increased for the 17th consecutive quarter on a quarterly year-over-year basis, the slowdown is evident in all component indicators. The industrial sector lost steam; although industrial electricity sales grew 11 consecutive quarters, its pace of growth fell two straight quarters. A similar trend was reflected in the labor market; the pace of increases in the number of employed residents decelerated since spring 2014. The tourism sector wasn’t an exception; the growth rates of both traveler spending at lodgings and average Saturday vehicle traffic counts were almost halved from their winter 2013 growth rates. However, all this may not mean an impending recession; the state economy’s leading indicators all pointed to a brighter future. The state’s housing market continued to cool off; the volume of home sales declined for the second straight quarter.

The economic activity decreased in Coos County between summer 2014 and summer 2013. The Economic Index fell for the first time since Winter 2013 on a year-over-year basis. The pace of growth decreased steadily for three straight quarters. Though, three of the five component indicators still remained up from their 2013 summer levels. The decline in the economic activity was attributed largely to the struggling goods-producing sector and the stagnant labor market. Number of employed residents declined two quarters in a row on a year-over-year basis, while industrial electricity sales fell after increasing two consecutive quarters. The County’s housing market activity fell; both home sales and median home prices decreased from a year earlier. On a positive note, the tourism sector continued to grow; both average Saturday vehicle traffic counts and spending at lodgings were up from the prior year. But the pace of growth in spending at lodgings declined three straight quarter.

The State’s economy remained on track to recovery in summer 2014. The State Index increased 16 consecutive quarters on a year-over-year basis. All five component indicators remained up from the prior year. But, the pace of growth fell after increasing two straight quarters. The industrial sector continued to get stronger; industrial electricity sales grew ten consecutive quarters. The labor market remained strong as well; the number of employed residents expanded on a year-over-year basis. The tourism sector continued to be a force behind the recovery; Saturday vehicle traffic counts rose five quarters in a row and spending at lodgings increased six consecutive quarters on a year-over-year basis. The state’s housing market cooled off; home sales declined from prior year for the first time since summer 2011. Lastly, we are excited to announce an addition of a leading indicator for the state’s tourism industry. It is reported at the bottom of the leading indicator section.

The economic activity increased in Coos County between spring 2014 and spring 2013. The economy registered positive growth for the fifth consecutive quarter on a year-over-year basis, although the pace of growth declined two straight quarters. Four of the five component indicators were up from their 2013 spring levels. The tourism sector continued to lead the county’s economic recovery; both average Saturday vehicle traffic counts and spending at lodgings remained up from the prior year. The good-producing sector gained momentum; industrial electricity sales increased two consecutive quarters on a year-over-year basis. As a cautionary note, there were some early indications that the recovery may be slowing down. Number of employed residents declined from prior year for the first time since winter 2013. In addition, the pace of growth in spending at lodgings declined two straight quarter. The County’s housing market hit the brakes; both housing sales and median home prices were lower than their 2013 spring levels.

The State’s economic recovery gained momentum and widespread in spring 2014. The State Index increased 15 consecutive quarters on a year-over-year basis. The pace of growth rose two straight quarters. All five component indicators remained up from the prior year. The industrial sector gained momentum; industrial electricity sales grew nine consecutive quarters and its pace of growth increased three straight quarters. The labor market stayed the course on recovery; the pace of increases in the number of employed residents accelerated. The tourism sector continued to be a force behind the recovery; both average Saturday vehicle traffic counts and spending at lodgings were higher than their spring 2013 levels. The state’s housing market showed signs of cooling off; the pace of increases in median home prices slowed for the first time since Fall 2012.

In Winter 2014, the County’s economy remained on its path of economic recovery despite severe winter weather. Although the winter storms dampened the pace of growth, the County Index increased four consecutive quarters on a year-over-year basis with all five component indicators up from their 2013 winter levels. The good-producing sector started growing again; industrial electricity sales was higher than the prior year for the first time since Spring 2011. The labor market continued to improve; both number of employed residents and estimated wages and salaries were up from a year earlier. The tourism sector remained strong as well; both average Saturday vehicle traffic counts and spending at lodgings remained up from the prior year. The County’s housing market appeared to have reached a plateau; housing sales declined for the first time in two years, while the pace of increases in housing prices fell for the third quarter in a row.

The State’s economy advanced in Winter 2014. The State Index increased 14 consecutive quarters on a year-over-year basis. The pace of growth rose four straight quarters. All five component indicators remained up from the prior year. The industrial sector was stronger; industrial electricity sales grew eight consecutive quarters and its pace of growth increased two straight quarters. The labor market continued its recovery as well; both number of employed residents and estimated wages and salaries remained up from the prior year. The tourism sector grew stronger; both average Saturday vehicle traffic counts and spending at lodgings continued to grow at faster clips. However, the leading indicators showed a mixed picture regarding the future economic activity. Only one of the four state leading indicators was up in February. The state’s housing market showed signs of cooling off; the growth rate of home sales continued to decline and fell to the lowest rate in two years.